The New Year has started off with a weaker USD and some weakness in global equity markets, and things are starting to look very interesting for the year ahead. While equity markets have been factoring in the tax write-down they're likely to have to take, and for some US corporations this is in the billions of dollars - in all likelihood the long term tax boost will pay dividends for US equity traders who are looking to see what the future holds in terms of earnings thereafter. For me this was clear to see on the S&P 500 which saw some bearish pressure but mostly saw the bulls look to return to the market. The USA as a whole has been showing signs of booming as of late, and many are now expecting to see some large scale infrastructure bill come into play in 2018 after the tax reforms to further the boom. The downside of course is that we could see some strong inflationary pressure if the USD continues to fall and economic growth expands as well rapidly.

On the charts it's a case of a pause and breath moment as the bulls in the market look to make their presence felt again. Current support at 2675 has held back any momentum lower and expectations are that we will see a retest of 2700 and potentially a push higher if equity markets feel it's deserved. Beyond these levels it's uncharted territory so for traders they will be looking for daily pivot points or the major psychological levels around the 2725 and 2750 mark when going higher. If the bears did swing back into the market and there was a correction I would expect support pressure at 2650, but also keep an eye on the 20 day moving average which can fight off the intraday traders.

Gold has also been the stunner of the year. In the previous last weeks of December we saw the bulls surge back into the market on US inflation fears, but also some worries that Cryptocurrencies could be in a bubble and equity markets also might be a bit inflated. It's always worth paying attention to gold as it can be very much the canary in the coal mine for traders and when it starts rushing higher it could be a sign of things to come as we saw in the build up to the financial crisis.

So far the gold rush has caused the bulls to surge into the market pushing it past the 1300 mark, which is a strong sign. The question will be if it can push higher and raise a few eye brows in the process. Gold is likely to find strong resistance at 1336 on the charts, and I would anticipate the possibility of it climbing higher if we see further weakness in the USD. With the next level above this coming in at 1350. If we see a bearish shift then expect pressure on 1294 and 1282 as it looks to slide down the charts. However, at present the bulls are looking very strong in the current market climate.

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